Radio is one of those things – like bubble gum and little scented soaps – that fills modern society's "pleasure without thinking" headspace. Whether it's blathering talk radio (Protip: don't take them seriously) or music of whatever variety, radio supplies entertainment and distraction needs for hundreds of millions – possibly billions – of people every day. Thought about that way, it's a powerful medium.

It's also a medium undergoing transformation. Along with its slightly younger cousin, television, radio is on the edge of a truly Internet revolution. The question is, in what form will the inevitable survivor take? Will it be large and corporate or will be rather be small and decentralized? There are already indicators that – at least initially – corporate is going to win out.

Crowded field with megaplayers
The recent announcement by Apple (NASDAQ:AAPL) that mobile iOS 7 will include iTunes radio should give some people pause. Apple has, with its iTunes music platform, already been a transformative company in the music business. Both major music labels and small indie acts have been forced to adapt to the ability for consumers to easily access and purchase music online.

Still, it's not for everyone. Pandora (NYSE:P) and Spotify are out there and streaming is the fastest growing segment of the music consumption business. Streaming allows consumers to enjoy music for the well-understood cost of either a subscription fee or listening to advertising. Pandora is still losing money – and may never actually make a profit – but then again it might. The stock has been trending upwards, going up more than 200% since last November. Heck, the firm's EPS of -0.28 indicates that it's getting close to getting where it needs to be.

Streaming is a developing medium. With Pandora out there capturing headlines – and issuing more stock to generate some money and possibly to steal some headlines – and Apple ready to fight it out, even old conservative Microsoft (NASDAQ:MSFT) is in the game with Xbox Music. Part of Microsoft's attempt to recreate itself in the new mobile environment, tying the new music service with the one truly world-class piece of hardware the company has come up with – the Xbox-is interesting. The company's stock is up 24% so far this year and the new direction is a solid piece of that growth.

Another key player investors should be aware of is Google (NASDAQ:GOOGL). With the somewhat quiet launch of Google Play, the monsters of the tech world are beginning to establish their own $9.99/month beachhead on what the world thinks will be all out war for the dollars of consumers. Google has a long history of launching services seemingly on the fly and making them work. The issue is really whether the company will pay enough attention to streaming music to compete in a fast-developing market.

Can Pandora show investors hope?
Still, the real issue that's got people talking is Pandora. Getting into Pandora is – at best – speculative. The stock is an aggressive buy and not for the faint of heart. There's going to be no dividend, nor will there be any guarantee of even medium-term existence. The streaming market – which is more crowded now that Apple is involved – is still an evolving one. For heaven's sake, even the technology itself is evolving. Ever greater broadband and new platforms could lead to Pandora failing simply by leaning the wrong way on some new trend.

By the numbers, Pandora shows good signs. As stated, its EPS is negative, but not horribly so. And its 10Q shows that the company's assets are exceeding its liabilities. That's good. However, while the total assets went up, a lot of it is in accounts receivable. Current cash and short-term investments both went down. Toss in that liabilities went up more than assets – including a $10 million long-term debt increase – and it's enough to give someone ulcers.

Risky, but maybe worthwhile
Still, if you have some risky money and want to take a chance on it, Pandora might be the space for you. Just realize that other systems are out there and competing with the company. Competing against Apple, Microsoft, and Google is not a happy place for an upstart firm that's still in the venture cap phase of its development. Anyone wanting to invest in Pandora had better go into it eyes open to two things: first, don't expect a huge profit quickly and second, don't be surprised if you lose your investment.

Fool contributor John Breeden has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Pandora Media. The Motley Fool owns shares of Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.